Ex Comptroller guilty in pension scandal

A former Queens Assemblymember who once was the state’s top financial officer now has another title he can add to his résumé – felon.

Alan Hevesi pleaded guilty to being involved in a pay-to-play kickback scheme on Thursday, October 7, acknowledging taking money in a state pension scandal while he was the Comptroller of New York.

Hevesi acknowledged receiving nearly $1 million in gifts in exchange for improperly favoring and approving a $250 million investment in Markstone Capital Partners, L.P. from the New York State Common Retirement Fund. The gifts consisted of $75,000 in travel expenses for Hevesi and his family, $380,000 in sham consulting fees for a lobbyist friend, and more than $500,000 in campaign contributions as directed by Hevesi. He could face up a maximum of four years in jail.

“I deeply regret my conduct and I sincerely and deeply apologize to the people of the State of New York, to the court, to my family,” Hevesi said in court on Thursday, October 7.

New York State Attorney General Andrew Cuomo’s office began investigating the State Comptroller’s Office and pension scandal shortly after Hevesi resigned from the Comptroller position in 2006. Hevesi resigned after pleading guilty to defrauding the state government, specifically by using a state employee as a personal chauffeur for his sick wife.

To date, Cuomo’s long-running, pension investigation has resulted in seven guilty pleas and has garnered $138 million in recoveries for the state through agreements with 15 firms and two individuals.

Hevesi, who could become the state’s highest elected official in many years to serve jail time, acknowledged that while he served as Comptroller he was aware that Henry “Hank” Morris – his paid political adviser and campaign manager – was using the pension fund for a pay-to-play scheme in which Morris personally received fees from pension deals and steered investments to friends and political associates.

“Alan Hevesi presided over a culture of corruption and violated his oath as a public servant,” said Cuomo. “He was solely charged with protecting our pension fund, but he exploited it for his personal benefit instead. With his guilty plea, we can now focus on the process of restoring public trust in government.”

Although Hevesi’s guilty plea acknowledged he received $75,000 in travel expenses for his family, none of his family members, including current Queens Assemblymember Andrew Hevesi, are expected to be charged in the scheme. Andrew Hevesi is running for reelection in Assembly District 28 against Republican Alex Powietrzynski.